Until 480 Mbps high-speed USB was widespread, Apple had specific use cases for USB and Firewire. USB replaced ADB and RS-232 for devices like keyboards, mice, and modems. Firewire replaced SCSI for devices that needed higher speeds, mostly hard drives, but later digital video.
The original iPod was a Firewire device because USB 2.0 was still a paper spec when the iPod was in development. If you were prototyping a new device built around a 5 GB hard drive, and given the choice of a 400 Mbps Firewire connection or a CPU-dependent 12 Mbps USB 1.1 connection to fill that drive, which would you choose? Creative Nomad players from that same era had both USB 1.1 (sloooowww sync, but PC compatible) and Firewire (fast sync) ports, but they were also much larger than the iPod. They also had more space, and were not lame.